Correlation Between Great West and AGEDB Technology

Can any of the company-specific risk be diversified away by investing in both Great West and AGEDB Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Great West and AGEDB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Great West Lifeco and AGEDB Technology, you can compare the effects of market volatilities on Great West and AGEDB Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Great West with a short position of AGEDB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and AGEDB Technology.

Diversification Opportunities for Great West and AGEDB Technology

-0.97

Correlation Coefficient

Great West  AGEDB Technology

Pay attention - limited upside

The 3 months correlation between Great and AGEDB is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco and AGEDB Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGEDB Technology and Great West is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Great West Lifeco are associated (or correlated) with AGEDB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGEDB Technology has no effect on the direction of Great West i.e., Great West and AGEDB Technology go up and down completely randomly.

Pair Corralation between Great West and AGEDB Technology

Assuming the 90 days trading horizon Great West Lifeco is expected to generate 0.14 times more return on investment than AGEDB Technology. However, Great West Lifeco is 7.27 times less risky than AGEDB Technology. It trades about 0.14 of its potential returns per unit of risk. AGEDB Technology is currently generating about -0.1 per unit of risk. If you would invest  4,682  in Great West Lifeco on December 21, 2024 and sell it today you would earn a total of  630.00  from holding Great West Lifeco or generate 13.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Great West Lifeco  vs.  AGEDB Technology

Great West Lifeco

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Lifeco are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Great West displayed solid returns over the last few months and may actually be approaching a breakup point.

AGEDB Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGEDB Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Great West and AGEDB Technology

The main advantage of trading using opposite Great West and AGEDB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, AGEDB Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AGEDB Technology will offset losses from the drop in AGEDB Technology's long position.

The idea behind Great West Lifeco and AGEDB Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.